UPDATE 1-Silver Lake's bid for Dell started at $11.22 per share-source

NEW YORK, March 15 Private equity firm Silver
Lake Partners bid as low as $11.22 per share for Dell Inc
in mid 2012, when it first discussed a buyout with
founder and CEO Michael Dell, according to a person familiar
with the situation.

Since then, on February 5 this year, Silver Lake and Michael
Dell raised their bid to take the world's No. 3 personal
computer maker private to $13.65 a share. At $24.4 billion, it
would be the largest private equity-led buyout since the 2008
financial crisis.

When the bid was first announced, the price represented a 25
per cent premium over the stock price before news of the bid,
but Dell's share price closed at $14.31 on Friday.

The computer maker has said repeatedly that the bid comes
only after extensive review and negotiations, and has deemed it
fair to shareholders and that view will likely be emphasized
again in an upcoming proxy filing with the SEC.

But some analysts say Michael Dell and Silver Lake may
eventually raise their bid to try to appease investors in Dell
like Southeastern who complain it undervalues the company.

Michael Dell is trying to complete his company's transition
from a low-margin PC maker into a provider of computing
services. The makeover has become more urgent as the PC market
shrinks. Analysts say it might best be carried out if the
company were taken private, away from public shareholder
pressure and scrutiny.

BID DISCUSSIONS GO BACK TO MID-2012

CNBC first reported the opening bid and, according to the
business television network, private equity house KKR & Co LP
had also discussed a bid for Dell at $12 to $13 a share
but dropped that offer in December last year.

Several major shareholders voiced opposition to the bid
including Southeastern Asset Management and T. Rowe Price.

A second person familiar with the matter told Reuters that
Southeastern, Dell's largest independent shareholder, had itself
broached the possibility of a leveraged buyout to Michael Dell
in the summer of 2012, when it expressed interest in
contributing its equity in Dell toward any deal.

But two other sources familiar with Southeastern's thinking
told Reuters the firm had not touched on any sort of private
equity-led buyout deal during talks with Michael Dell last
summer.

These sources said Southeastern proposed a transaction
similar to one it outlined on Feb. 8 in a letter to the board,
when it outlined a so-called "Dutch auction" or tender offer to
all shareholders, the two sources added.

Southeastern's objection to the current bid, like that of
many other investors, is that the buyout as it stands severely
undervalues the corporation.

All sources asked not to be named because the matter is not
public. Dell did not respond to requests for comment and
Southeastern declined to comment.

A clearer picture of the negotiations leading up to the deal
is expected to emerge in the last week of March in a company
proxy filing.

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